GameStop May Be Highly Motivated To Push Xbox Series X Sales Over PS5

One such company is GameStop, which has signed a multi-year agreement with Microsoft that will see it receive a cut from every digital purchase made on an Xbox Series S or Xbox Series X for the life of the console. The first hints of this new tie-up between the two companies came in a press release last week, which confirmed a "strategic partnership agreement with Microsoft Corp., further advancing its strategy to expand its physical and digital video game offerings, as well as enhance the company’s retail technology infrastructure.

"GameStop and Microsoft will both benefit from the customer acquisition and lifetime revenue value of each gamer brought into the Xbox ecosystem."

GameStop could be considered part of "old guard" with regards to game retailers, relying primarily on the sale of physical hardware and software (both new and used) rather than digital sales. Many had wondered how a company like GameStop would be able to thrive in a segment that is increasingly moving towards digital game sales; just witness the arrival of the PlayStation 5 Digital Edition and Xbox Series S. Well, now we know how the company is planning on staying relevant.

In a tweet, DOMO Capital Management confirmed the terms of the arrangement in a tweet, writing:

Today $GME confirmed with @DOMOCAPITAL that the agreement with $MSFT includes revenue sharing on all downstream revenue (i.e. digital downloads and digital content) from any device that GameStop brings into the @Xbox ecosystem.  GameStop now meaningfully participates in digital.

So, it appears that as long as you purchase an Xbox Series S or Xbox Series X from GameStop, everything digital purchase that you make going forward will result in the retailer receiving a cut. Every game purchased digitally from Microsoft, every DLC purchase and microtransaction, and even a cut from subscription revenue (i.e. Xbox Game Pass and Xbox Live Gold). However, what's not known is how much of a cut that GameStop will be receiving.

You might be asking (as we did), ‘What is Microsoft getting out of this deal’? Well, GameStop has agreed to "standardize its back-end and in-store solutions" with Microsoft cloud-based applications and data platforms. GameStop employees will also use Microsoft Surface devices to complete transactions, allowing them to "move freely within the store footprint". 

Whatever the case, if you walk into a GameStop undecided on whether you want to purchase a PlayStation 5 or Xbox Series S/X, we can say for certain that employees will have a pretty big incentive to point you into the direction of the Xbox...